Tech stocks have become a central pillar of most investor portfolios, driving performance amid the AI revolution. But while they can promise huge opportunities, they can also bring significant uncertainty and the growing concern surrounding concentration risk from a select few overperformers. Rather than reducing tech exposure, an active tech ETF like GTEK can provide the right balance.
Key Takeaways:
- The active tech ETF GTEK has outperformed its average in its ETF Database category YTD.
- The fund has also outperformed some rival ETFs while also sending a buy signal.
- The strategy’s active, bottom-up approach and avoidance of megacap overexposure make it an intriguing solution for many investors.
The Goldman Sachs Future Tech Leaders Equity ETF (GTEK ) has produced strong returns YTD and has outperformed both rival tech ETFs and specific tech stocks. Charging 75 basis points, the fund actively invests in tech firms poised to drive global innovation.
Specifically, the active tech ETF uses a bottom-up approach, emphasizing high conviction options. Focusing on growth potential, the strategy excludes those megacap tech names that most investors already hold. Its active remit empowers the active ETF to invest in other tech sectors such as communications and health care as well. The fund’s managers screen for metrics indicative of growth and quality such as sustainable free cash flow generation.
Combined, these factors generated a 45.2% YTD return and an impressive 68.2% over the last 12 months, as per ETF Database data. Notably, both figures have outperformed the Database Technology Equities Category average in those time frames.
According to YCharts data, GTEK has also outperformed rival tech strategies as well as individual stocks. What’s more, it has also sent a buy signal according to its tech chart. This Spring, the fund’s price rose above both its 50 and 200-day Simple Moving Averages (SMAs) — a common buy signal indicator in tech analysis.
See more: Goldman Sachs ETFs Hit $100 Billion AUM
By avoiding the big names and actively seeking out innovation, GTEK has proven itself to be an adaptable, resilient route to tech outperformance.
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